Home / Questions / Consider the following two mutually exclusive projects Year Cash Flow A Cash Flow B 0 $ 4...
Consider the following two mutually exclusive projects:
Year | Cash Flow (A) | Cash Flow (B) | ||
0 | –$ | 417,000 | –$ | 36,000 |
1 | 48,000 | 19,600 | ||
2 | 58,000 | 14,100 | ||
3 | 75,000 | 14,600 | ||
4 | 532,000 | 11,400 | ||
The required return on these investments is 13 percent.
a. What is the payback period for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Payback period | ||
Project A | years | |
Project B | years | |
b. What is the NPV for each project? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Net present value | ||
Project A | $ | |
Project B | $ | |
c. What is the IRR for each project? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
Internal rate of return | ||
Project A | $ | |
Project B | $ | |
d. What is the profitability index for each project? (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
Profitability index | ||
Project A | ||
Project B |
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